The proportionally greater drop in personal injury and bodily injury claims as a percentage of all accidents is a further indication of the benefits of safety engineering in todays cars and roads.

On the flip side, the IRC study found that the actual cost of claims placed is growing at an average rate of 3% every year. The rising cost of repairs and medical treatment when accidents do happen has erased most of the underlying cost benefits gained by the drop in accident rates. Elizabeth Sprinkel, Senior VP of the IRC notes that if accident rates should start to return to their historic pace then increasing loss severity “will create upward cost pressure on consumers.”

So, if you want to see your auto insurance rates stay stable, lets be careful out there.

Motor vehicle crashes are the leading cause of death for people ages two to
34.

• A motor vehicle death occurs on average every 12 minutes and an injury
  every 12 seconds. About 117 people died each day in motor vehicle crashes
  in 2006.
• Since the first documented crash death in 1899, more than 30 million
  people worldwide have died in traffic crashes.

FATALITIES AND INJURIES

• Overall: The U.S. Department of Transportation’s Fatal Analysis Reporting System in the National Highway Traffic Safety Administration (NHTSA, http://www.nhtsa.dot.gov ) division reports that 42,642 people died in motor vehicle crashes in 2006, down 2.0 percent from 43,510 in 2005. 2006 motor vehicle fatalities were at the lowest level in five years. While deaths among passenger vehicle occupants and nonoccupants fell in 2006, motorcycle riders suffered a 5.1 percent increase. This was the ninth consecutive annual increase in motorcycle rider deaths.In 2006, the number of people injured in motor vehicle crashes fell 4.6 percent from 2,699,000 in 2005 to 2,575,000 in 2006.
• By Vehicle Miles Traveled: The fatality rate—measured as deaths per 100 million vehicle miles traveled—was 1.41 in 2006, down from 1.46 in 2005.
• By Crash Type: In 2006, there were 5,973,588 police-reported motor vehicle traffic crashes, down 3.0 percent from 6,159,252 in 2005. Of total crashes, 1,746,000 caused injuries and 4,189,000 caused property damage only. NHTSA estimates 10 million or more crashes go unreported every year.
• Work-Related: In 2006 crashes involving vehicles on public roadways were the leading cause of work-related fatalities, according to the U.S. Bureau of Labor Statistics, accounting for 23 percent of all fatal work injuries.
• By Age Group: In 2006, older people (65 and older) made up 14 percent of all traffic fatalities, 14 percent of vehicle occupant fatalities and 19 percent of pedestrian fatalities, in large part because they are frailer and more likely to die from their injuries than younger people. (See Older Drivers paper.) In 2005 (latest data available) there were 29 million older licensed drivers, up from 17 percent in 1995. The total number of drivers rose only 14 percent from 1995 to 2005.In 2006 drivers between the ages of 15 and 20 accounted for 12.9 percent of all drivers in fatal crashes and for 16 percent of all drivers in police-reported crashes. In 2005 (latest available data) drivers in this age group accounted for 6.3 percent of all licensed drivers. To reduce high accident rates among young drivers, states are increasingly adopting graduated driver license programs, which allow young drivers to improve their skills and driving habits. (See Teen Driving paper).
• By Driver BehaviorSpeeding: In 2006, 13,543 lives were lost due to speed-related accidents. Speeding was a contributing factor in 31 percent of all fatal crashes. In 2006, 39 percent of 15- to 20-year-old male drivers who were involved in fatal crashes were speeding at the time of the crash. NHTSA says that speed-related crashes cost Americans $40.4 billion each year. A crash is considered speed related when the driver is charged with a speed-related offense or a law enforcement officer indicates that exceeding the posted speed limit, driving too fast for conditions or racing was a contributing factor.Drunk Driving: There is an alcohol-related traffic fatality every 29 minutes. In 2006, 17,602 people died in alcohol-related crashes, up slightly from 17,590 in 2005 and was the highest level since 1996. Alcohol was involved in 41 percent of all crash fatalities in 2006. (See Drunk Driving paper.) Alcohol-related crashes are defined as those where someone involved, either a driver or a nonoccupant such as a pedestrian or bicyclist, had a traceable amount of alcohol in his or her blood.Drunk Driving and Speeding: In 2006, 41 percent of intoxicated drivers (with a blood-alcohol content at or above 0.08, the definition of drunkenness) involved in fatal crashes were speeding, compared with 15 percent of sober drivers involved in fatal crashes.Red Light Running: The Insurance Institute for Highway Safety (IIHS) says that more than 900 people a year die and nearly 2,000 are injured as a result of vehicles running red lights. About half of those deaths are pedestrians and occupants of other vehicles who are hit by red light runners.

  Fatigue: NHTSA statistics show that at least 100,000 crashes and 1,500 deaths each year are the result of drivers falling asleep at the wheel. A 2002 poll conducted by the National Sleep Foundation found that 100 million drivers, close to half of American adult drivers, drive while drowsy and nearly two out of ten admitted to having fallen asleep at the wheel. New Jersey passed a law in 2003 that equates falling asleep at the wheel with reckless driving, and if a driver falls asleep and kills someone in a crash, he or she can be charged with vehicular homicide and serve up to ten years in jail and pay fines. Although at least four states have considered similar legislation, New Jersey is the only state with such a law on the books.

• Distracted Driving: A study sponsored by Nationwide Insurance, which surveyed 1,200 drivers between the ages of 18 and 60, found that 81 percent of drivers “multitasked” (engaged in distracting behaviors while driving) at least sometimes. One in eight said he or she changed radio stations or CDs. The same proportion acknowledged drinking a beverage. Almost three-quarters talked on a cell phone, and 68 percent ate a snack. Twenty-three percent acknowledged they experienced road rage and 4 percent said they have driven while intoxicated.
• The January 2007 study also found that the youngest drivers, age 18 to 27, were the most likely to always multitask while driving—35 percent. Thirty percent of drivers age 28 to 44 always multitasked and 21 percent of the 45-to 60-year-olds always multitasked.
• Some form of driver inattention was involved in almost 80 percent of crashes and 65 percent of near-crashes within three seconds of the event, according to an April 2006 study conducted by the Virginia Tech Transportation Institute and the National Highway Traffic Safety Administration (NHTSA). The 100-Car Naturalistic Driving Study broke new ground—earlier research found that driver inattention was responsible for 25 to 30 percent of crashes. The 2006 study found that the most common distraction was the use of cell phones, followed by drowsiness. However, cell phone use was far less likely to be the cause of a crash or near-miss than other distractions. For example, while reaching for a moving object such as a falling cup increased the risk of a crash or near-crash by nine times, talking or listening on a hand-held cell phone only increased the risk by 1.3 times. The study tracked the behavior of the 241 drivers of 100 vehicles for more than one year. The drivers were involved in 82 crashes, 761 near-crashes and 8,295 critical incidents. (See also Cell Phones and Driving.)
• Cell Phone Use: In July 2007, the National Highway Traffic Safety Administration and the National Center for Statistics and Analysis released the results of their National Occupant Protection Use Survey (NOPUS), which found that in 2006 5 percent of drivers used hand-held cell phones, down from 6 percent in 2005, the first decline since the survey began tracking hand-held cell phone use in 2000. The decline in use occurred in a number of driver categories, including female drivers (down from 8 to 6 percent), drivers in the Midwest (down from 8 to 4 percent), drivers age 25 to 69 (down from 6 to 4 percent) and drivers of passenger cars (down from 6 to 4 percent) to name but a few. NOPUS is a probability-based observational survey. Data on driver cell-phone use were collected at random stop signs or stoplights only while vehicles were stopped and only during daylight hours. (See also Cell Phones and Driving.)
• Many studies have shown that using hand-held cell phones while driving can constitute a hazardous distraction. However, the theory that hands-free sets are safer has been challenged by the findings of several studies. A study from researchers at the University of Utah, published in the summer 2006 issue of Human Factors concludes that talking on a cell phone while driving is as dangerous as driving drunk, even if the phone is a hands-free model. An earlier study by researchers at the university found that motorists who talked on hands-free cell phones were 18 percent slower in braking and took 17 percent longer to regain the speed they lost when they braked.
• Deer Collisions: The Insurance Institute for Highway Safety estimates that there are more than 1.5 million deer-vehicle collisions each year, resulting in 150 occupant deaths, tens of thousands of injuries and over $1 billion in vehicle damage. The average claim for collision damage is about $3,000, with costs varying depending on the type of vehicle and severity of damage; claims involving medical payments can add thousands of dollars, according to the Insurance Information Institute. Some states experience more deer collisions than others. According to a study of annual claim statistics, the states with the highest number of accidents involving deer from 2005 to 2006 were: Pennsylvania, Michigan, Illinois, Ohio, Georgia, Virginia, Minnesota, Texas, Indiana and South Carolina. The deer migration and mating season generally runs from October through December, and causes a dramatic increase in the movement of the deer population. As a result, more deer-vehicle collisions occur during this period than at any other time of year.
• Hit and Run Crashes: According to the National Highway Traffic Safety Administration (NHTSA) there were 1,106 fatal hit and run crashes in 2005, that is, crashes where the driver left the scene after a collision with a person not in a motor vehicle. In this analysis NHTSA does not include hit and run collisions between vehicles only. Hit and run crashes in 2005 were up 20.6 percent from 917 in 2000. In 2005, 2,610 people died in these crashes, a 14.4 percent increase from 2,281 in 2000. There were 1,231 vehicles involved in these crashes I n 2006, up 20.0 percent from 1,026 in 2000.
• By VehicleSUVs: The number of people killed in SUV rollover crashes fell 0.2 percent from 2,895 in 2005 to 2,888 in 2006, according to NHTSA. In 2006 SUVs had the highest occupant fatality rate of any vehicle type in rollover crashes at 7.77 per 100,000 registered vehicles. This compares with 6.98 for pickup trucks, 3.10 for vans and 3.18 for passenger cars.Motorcycles: NHTSA says that in 2006, 4,810 motorcyclists died in crashes, marking the ninth consecutive year of increasing motorcycle deaths and a 5.1 percent increase from 4,576 in 2005. 2006 fatalities were the highest since 1981. In addition, motorcycle rider fatalities increased to 11.3 percent of all motor vehicle crash fatalities, compared with 5.0 percent in 1997. (See Motorcycle Crashes paper.) Between 1997 and 2006, motorcycle fatalities rose 127 percent. In 2005 (latest data available for registration statistics) motorcycles accounted for about 3 percent of all registered motor vehicles and 0.4 percent of vehicle miles traveled. However, per vehicle mile traveled in 2005, motorcyclists were about 37 times more likely than passenger car occupants to die in a crash and eight times more likely to be injured.Large Trucks: According to NHTSA, 4,995 people died in crashes involving large trucks in 2006, compared with 5,240 in 2005, a decrease of 4.7 percent. Although large trucks amounted to 3 percent of all registered vehicles in 2005 (latest year available for registration statistics), they accounted for 8 percent of all vehicles involved in fatal crashes in 2006. One out of nine traffic fatalities in 2006 resulted from a collision involving a large truck.

Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide a means to compare prices.

Get quotes from different types of insurance companies. Some sell through their own agents. Some sell through independent agents who offer policies from several insurance companies. Other companies sell directly to consumers over the phone or via the Internet. The price may vary depending on the sales method.

But don’t shop by price alone. You want a company that answers your questions and handles claims fairly and efficiently. Sources for finding the right kind of company include: word of mouth, i.e. friends, relatives, co-workers; your state insurance department, where you can find consumer complaint ratios by company; and consumer magazines. You can also check the financial health of insurance companies through independent rating companies.

Before you buy a car, compare insurance costs

Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft, such as air bags, anti-lock brakes, daytime running lights and anti-theft devices.

For more information on car safety, check the Insurance Institute for Highway Safety.

Cars that are favorite targets for thieves cost more to insure. For more information on car theft, check the National Insurance Crime Bureau (NICB).

Ask for a higher deductable

Your deductible is the amount of money you pay out-of-pocket before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage premium by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. However, keep in mind that you’ll need to have the amount of the deductible on hand should something happen to your car.

Reduce coverage in older cars

Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. Any claim payment you receive would not substantially exceed your premiums minus the deductible. Claims occur on average only once every 11 or 12 years. Auto dealers and banks can tell you the worth of a car, or you can look it up online at Kelley Blue Book.

Buy your homeowners and auto coverage from the same insurer
Many insurers will give you a discount if you buy two or more types of insurance from them. Also, you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce premiums for long-time customers. But shop around carefully; you may still save more money buying from a different insurance company even with the multi-policy discount.

Take advantage of low-mileage discounts
Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Ask about group insurance
You may be eligible to get insurance through a group plan from your employer, or through professional, business and alumni groups or other associations. Group plans often provide substantial discounts. Ask your employer, or any groups or clubs of which you are a member, about this option.

Maintain good credit
Your credit rating may affect what you pay for insurance, so monitor it carefully. You can get this information directly from the three major credit-rating agencies (Equifax, Experian, Trans Union). There are also various Web sites that allow you to check your credit rating and provide tips on how to improve your score.

Seek out safe driver discounts
Most insurance companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also qualify for a cut if you have recently taken a defensive driving course, if you are over 50 and retired, or if there is a young driver on the policy who is a good student, has taken a drivers education course or is away at a college, generally at least 100 miles away.

When you comparison shop, be sure to inquire about discounts for the following (availability will vary according to the state and company):

• 1. • No accidents in 3 years
     • No moving violations in 3 years
     • Drivers over 50 to 55 years of age
     • Driver training course
     • Defensive driving course
     • Student drivers with good grades
     • College students away from home
     • $500 deductible
     • $1,000 deductible
     • Air bags
     • Anti-lock brakes
     • Daytime running lights
     • Anti-theft device
     • Low annual mileage
     • Auto and homeowners coverage with the same company
     • More than one car insured with the same company
     • Long-time customer

But don’t forget that the key to savings is not the discounts but the final price. A company that offers few discounts may still have a lower overall price.

Violations could result in higher auto insurance premiums.

In brief, the new laws affect registration, smoking, license plate obstruction and probably the biggest issue, the use of cell phones.

Web rumor debunking site Snopes notes two separate instances of circulation of an e-mail purporting to list new traffic laws going into effect in California in 2007, with the second being much wider and expanding to encompass several other states as well.

Insurance reform hikes driver’s bill to $104,000
Teen had 10 speeding tickets, 3 crashes since 2005

Tuesday, December 11, 2007

EDMONTON – Barbara Wellensiek knew her son’s insurance bill would be steep because of his driving record, but when the renewal notice arrived she was shocked to see the annual premium was $104,566.63.

“I thought it was a typo,” the Edmonton woman said Monday. “I didn’t panic — I thought it was a mistake.”

When she phoned her insurance broker, Access Insurance Group, she got confirmation that the figure on the notice was accurate, the rate having been hiked from $1,300 per month.

“I just about fainted — how could this be?”

She calculated that her son, Janson Towers, would have to work full-time all year and earn $55 per hour just to pay his auto insurance premium.

Towers has all the factors going against him that add up to a high premium, even under the new grid system brought in when auto insurance reforms took effect in 2004.

He’s 19, and has a “tendency to speed,” Wellensiek said.

He got his first car at age 16. His licence was suspended twice. Since May 2005 he has received 10 speeding tickets, and has been in two minor “fender benders” and a rear-ender that totalled his car.

Though the insurance industry has complained that the grid system rewards bad drivers, an insurer could charge even more.

When the details of Towers’ driving record were put into the auto insurance rate calculator on the provincial government website, the maximum allowable charge that came out was $122,727.42 per year.

Wellensiek went to another insurance company, Morgex, which quoted her $50,000 for a premium on her son’s Nissan 240.

She has chipped in on his premiums before because of his need for a car. He has been playing junior football in Kelowna, taking physiotherapy because of football injuries, working part-time and is about to start attending Okanagan College.

But there’s no way the family can afford $50,000.

“If he can’t drive, I’m sure he’ll accept it. He’ll just have to wait until the convictions fall off.”

Towers said he’s moving permanently to British Columbia and is optimistic he can insure his car there for about the same rate he was paying in Alberta last year. If that doesn’t work out, he’ll have to ride his bike.

“I’d rather buy a house than pay that ($104,000),” he said.

He’s still shocked by the invoice, and says that most of the speeding tickets clocked him going just a few kilometres per hour over the limit.

Alison Gates-Kriston, spokeswoman for Alberta Finance, said there are three factors on the insurance rate grid: number of years of driving, accident claims and convictions.

“Your grid rating is a reflection of your driving record,” Gates-Kriston said. “It’s the driver’s decision as to whether they want to be insured or whether they want to stop driving.”

An official with Access Insurance Group, which quoted the $104,566.63 premium, said the company can’t comment because of privacy legislation.

Michael Debolt, government affairs manager for the Alberta office of the Insurance Bureau of Canada, was surprised by the amount of the premiums allowed under the grid rules, but said his industry is still opposed to capping rates under the grid system.

“We don’t believe in the grid at all — we believe an individual’s insurance premiums should reflect the risk they carry,” he said.

Bottom line… “He’ll just have to wait until the convictions fall off.” I’ve got friends who are legally blind and who have epilepsy and who can’t legally drive through no choice of their own. This kid’s problems are entirely due to his own frequent poor judgment. Youth get high rates. Youth who demonstrate good judgment get lower rates. Youth who demonstrate bad judgment get worse rates. Youth whose bad judgment have demonstrably caused many accidents get rates that anticipate likely accidents in the near future.

First of all, who is idiotic enough to pay for an insurance quote when there are so many online quote services (wink wink, nudge nudge). To the claim of actual “free auto insurance” I say, no shout, TANSTAAFL!

TANSTAAFL is an acronym from the writtings of Robert Heinlein: “There Ain’t No Such Thing As A Free Lunch” my favorite Heinlein Science Fiction novel, The Moon is a Harsh Mistress.

Heinlein’s wisdom applies to reports of “Free Car Insurance” that is making more frequent appearances in headlines and advertisements. In Australia, DaimlerChrysler is offering two years’ free car insurance to prospective buyers of its new Dodge Nitro SUV, around 10% of the value of the vehicle — not chump change. Volkswagen has already offered it here in the United States in some markets, to stimulate weak sales.

But what is really being offered?

Motley Fool’s article Get Free Car Insurance warns:

So, should you excitedly wait to buy your next car with free insurance? Not necessarily. Remember that these offers can cost the dealers up to around $3,000 per year per transaction — with younger drivers standing to gain the most. If a dealer is losing that much on a sale, he or she will likely be aiming to make much or all of that up elsewhere in the deal.

The article made me wonder if these offers would ever appear in urban areas with notoriously high insurance premiums.

The bottom line is you get what you pay for. Insurance companies and car companies are not in the habit of giving away profits. Shop wisely.

I think auto insurance carriers ought to allow the consumers to choose generic parts and get a break on their premiums.

Generic Auto Crash Parts

Crash parts, also referred to as cosmetic parts, are the sheet metal components of vehicles; the outside “skin� most frequently damaged in auto accidents, such as fenders, hoods and doors panels. There are two sources for crash parts: auto manufacturers, who sell them under their own names, also known as original-equipment manufacturers (OEMs), and generic or aftermarket crash parts suppliers. Before generic parts existed, creating competition in the marketplace, OEMs were able to sell their parts at much higher prices than they can today. The introduction of aftermarket parts forced down the price of OEM parts by an average of 30 percent. After a lawsuit against State Farm Insurance Co. for using generic parts, however, many insurers limited their use or stopped using them altogether.

In the continuing debate about whether generic parts are as good as parts from OEMs, the issue of safety is in the forefront. Critics claim that using parts from sources other than OEMs could compromise safety. However, the Insurance Institute for Highway Safety (IIHS) says that with the possible exception of hoods, there are no safety implications of using cosmetic crash parts from any source. This has been demonstrated by crash tests conducted at the IIHS. In addition, an independent, third-party nonprofit organization, Certified Automotive Parts Association (CAPA), rigorously inspects generic automotive parts and guarantees the quality of those that meet its high standards. Generic crash parts do not interfere with a vehicle’s existing warranty and are often manufactured by the same supplier and in the same manner as OEM parts.

RECENT DEVELOPMENTS

Lawsuits: In March 2007, a county court in Missouri awarded $17 million to 315,000 state residents in a class-action suit against American Family Mutual Insurance Company concerning aftermarket auto parts. The lawsuit stated that the insurer used inferior aftermarket parts, among other charges related to repairing damaged vehicles. The insurer, which does not use aftermarket parts on vehicles that are less than three model years old or to replace safety-related parts such as air bags, plans to appeal the verdict.

In December 2006, an administrative law judge of the United States International Trade Commission issued a preliminary ruling that, if upheld, could halt imports of certain aftermarket parts that the Ford Motor Company claims infringe on its patents. The judge found that some patents were not infringed, but that others were. The ruling will be reviewed by the International Trade Commission, which must issue its decision before March 5, 2007. In December 2005, Ford filed a design patent infringement complaint against Keystone Automotive Industries and other suppliers of aftermarket automotive parts. Advocates of the use of aftermarket parts fear that if this case succeeds, although few parts will be affected, success could lead other automobile manufacturers to employ similar tactics and ultimately reduce the availability of non-OEM parts.

The use of aftermarket parts of the same or higher quality than those from OEMs is credited with keeping down the cost of car repairs.

Prior to 1970, auto body repair shops could only buy replacement parts like fenders, door panels and grilles from auto manufacturers. Original-equipment manufacturers had no competition in this market, a monopoly they fight to preserve. When independent manufacturers in several countries, including the United States, began making sheet metal replacement parts, OEMs found themselves facing tough competition.

I’ll happily buy my generic Tylenol, Advil, Claritin and other meds. Ditto for allowing my insurance company to buy car parts if it will help me keep my premiums in check.

What do you think?